RBS plans Islamic banking products in Middle East

Zawya Dow Jones: Britain’s second-largest financial institution, Royal Bank of Scotland, is looking to introduce Islamic banking products and services to its customers in the Middle East, the bank’s head of the Middle East said.
“We are actively looking at introducing Islamic banking to our businesses in the Middle East in both retail and investment banking,” Colin Macdonald told Zawya Dow Jones in an interview in Dubai on Tuesday.
The region, home to the world’s biggest oil-exporting countries, has seen unprecedented prosperity as oil prices surged more than six-fold in as many years, triggering a boom in the Islamic banking industry.

Islamic finance industry is expected to hit $1tn by 2010 because of an increased global demand for Shariah-compliant financial products and services. Islamic banking assets are currently estimated at $750bn in value, according to Kuwait Finance House.RBS sees high interest among British investors in the Islamic banking industry, especially in bonds and financing facilities.

Macdonald’s comments followed the announcement by the Edinburgh-headquartered bank that it had rebranded all the ABN Amro businesses it took over in the GCC states last year, including United Arab Emirates and Qatar.

Dutch bank ABN Amro had three branches and two electronic banking centers in the UAE and one branch at the Qatar Financial Centre. RBS has two representative offices in Dubai and Abu Dhabi and one branch in Qatar. “The bank is now in the process of merging the two QFC branches,” Macdonald added.
RBS, whose employees in the UAE now exceed 2700, plans to expand its footprint in the Middle East with operations in retail banking, wealth management and investment banking.

“We’re exploring all expansion opportunities, physical presence and transactions,” he added.RBS, Banco Santander and Fortis consortium had acquired ABN Amro for $70bn, including ABN Amro’s 40% stake in Saudi Hollandi Bank.
Macdonald declined to comment on future plans for ABN Amro’s 40% stake in Saudi Hollandi Bank.

Royal Bank of Scotland yesterday priced its £800mn, 6.625%, 10-year bond issue, in a self-led deal, said a syndicate official at the bank on Tuesday.

Royal Bank Of Scotland Plans To Establish Islamic Subsidiary

Bernama -- Royal Bank of Scotland Bhd (RBS), formerly known as ABN AMRO Bank Bhd, plans to incorporate an Islamic subsidiary as part of its move to capture the growth potential of Islamic banking in Malaysia.

Its country head and managing director, Harry Naysmith said the bank will offer Islamic banking products to both retail and corporate customers.

"There are plans to incorporate an Islamic subsidiary and the neccessary applications will be made in due course," he said in a statement here Friday.

The bank has already obtained approval from Bank Negara Malaysia (BNM) to undertake Islamic banking products via an Islamic window.

Naysmith said that the bank was confident of the growth potential of Islamic banking here, given BNM's aspiration for Islamic banking to make up 20 percent of the total banking assets by 2010.Currently, Islamic banking constitute about 12 percent of total banking assets.

"With continued support in terms of regulations and incentives from the government, BNM and other regulators such as the Securities Commission, we expect the Islamic banking business to achieve this growth target," he said.

On another development, RBS said that it has come out with a new structured investment called the Royal Select Series 1 Structured Investment which allows investors to build a well-positioned investment portfolio in volatile market conditions.

It is a three-year ringgit denominated investment that offers 100 percent capital protection at maturity. Its maturity date is 2011.

It is linked to the performance of three diversified sectors and nine fortune 500 companies namely banking/financials, energy/mining and information technology sectors.

The Royal Select Series 1 offers a head start coupon of 22 percent and allocates the highest weightage to the best performing basket.

The offer period of this product will end on August 28.

A minimum investment of RM250,000 is required for the 100 percent principal protected structured investment.

Last year, RBS had launched more than 20 structured investments with complete diversification into various underlying assets and different markets.